The last two iTMS related announcements had equally dramatic effect: the one week sales figures for the original Mac-only launch, and the iTunes for Windows rollout. The stock jumped 4 or 5 dollars both of those times too.

Various possible reasons: - iPod sales are good - people overestimating financial impact of Airport Express (stock started to rise on day it was intro'd) - Euro iTunes - institutional investors buying the stock - overall stock market up trend and signs of increasing consumer confidence.

There was supposedly an analyst price-target of $40 in the next 18-months. During exuberant times for the market in the late '90s, such price targets would be hit in weeks if not days. Maybe something like that is at work again.

Still, you wonder if the stock won't be higher after Q1, following the Christmas season when they have their biggest quarter. You figure they will have new iPods for the fall if nothing else. Would be interesting to see which part of the year they usually hit their 52-week highs. Their two bigger quarters historically are Q4, the fall for the back to school buying season, and Q1, the holiday quarter. So it's interesting that they're hitting 3-year highs in Q3.

Some analyst last week thought that the punch through $26 (where it settled after the >50% drop a few years ago) was a critical psychological barrier, and that now the stock was free to trade all the way up to 50!

Hooey, I say. The fundamentals don't support it yet. But if AAPL has a few good quarters, it just might happen.

It'd be kinda cool if I could use some AAPL profits to buy some Apple gear

quote:Originally posted by stevenkan:AAPL's market cap is about $12.5 B, of which $4.6 B is cash. Sony has a market cap of $34.5 B, and they have $10.2 B in cash. They could do it. It wouldn't be very smart, but they could do it.

The stockholders have authorized a 'poison pill' provision, which makes APPL a more expensive buyout if I understand correctly also.

quote:Originally posted by Nevyn:The stockholders have authorized a 'poison pill' provision, which makes APPL a more expensive buyout if I understand correctly also.

There was a poison pill in the early days of Jobs2, the details of which are murky now and I recall it ultimately expired (something to do with their Tax rates post-"beleagured"?) but I've not heard of a more recent one. Got details?

About 18 months ago, Anderson showed a sensitivity analysis of turnover to net profit. If Apple's turnover reached $10b, net profit would be around $700m. This compares with turnover of $6-7b today and roughly breakeven profit. Obviously this is because the overhead absorption/operating leverage is better at higher turnover levels.

The second point is that when the fed looks to hike interest rates (which is the current expectation), share prices go down (discounted future cash flows are worth less at higher discount rates). In the case of Apple, it has $4.6b in cash - a 1% hike in rates means that Apple's interest income increases by $46m (and in the context of Apple's profitability at present, this is quite substantial). Perhaps this is affecting investors' outlook as well.

So taking these factors into account, say Apple does hit the mythical $10b in turnover through continued innovation, iPod, etc (and which it has achieved historically), my estimate of the numbers is: market cap $12.5b. Assume that the cash is paid out - the adjusted market cap is $7.9b. Divide the forecast net profit (at say $500m and $700m) into the adjusted market cap and you get p/e's of 15x and 11x, respectively. This makes the stock quite cheap - and probably also explains why the price has been going up. In my view, it remains a good buy.

Nah, too small. The iPod growth is already factored in, and the supercomputer is novel, but a $6M sale to the US govt. (where multi-billion dollar sales are common) will hardly move a company the size of Apple. iPods are good, and there's a nearly endless upper-bound on customers, but outside of the iTMS lock-in, it's hard to see how revenues would grow there once sales plateau - and who knows where that will be. No, the Mac engine needs to get out of idle and the G5 looks like it's going to make low-end sales a little problematic. We're gonna slow down a bit here.

In at $6.5 ($13 pre-split) and hanging on. I don't see $20 returning at the moment, but I don't see $35 necessarily either. Last sale was back when we were in the 50s. For the daring, AAPL options plays can be pretty lucrative given the timing of their announcements if you can work things out, but boy-howdy it's not for the weak of stomach and you can lose your shirt if you get it wrong. Last year's WWDC was damn generous, but it's been a lot more difficult since then.

quote:Originally posted by johnsonwax: I don't see $35 necessarily either. Last sale was back when we were in the 50s. For the daring, AAPL options plays can be pretty lucrative given the timing of their announcements if you can work things out, but boy-howdy it's not for the weak of stomach and you can lose your shirt if you get it wrong. Last year's WWDC was damn generous, but it's been a lot more difficult since then.

Well Merrill Lynch just raised their target to $39 today. From the private report, sorry no linkies.

quote:Highlights: '¢ We believe CEO Steve Jobs may introduce a new iMac at the Apple Worldwide Developers Conference next week in San Francisco. The other Macs have recently received updates; now it is iMac's turn. '¢ Apple's recent introduction of the iTunes Music Store in the U.K., France, and Germany dovetails with the iPod Mini going international in July. Expectations were for a U.K.-only launch, so France and Germany were a bit of a surprise. '¢ Apple continues to add products around the iPod. The new AirPort Express allows iTunes music to be played wirelessly on home stereos. Now it appears Apple will be going after the automotive market in teaming with Alpine and BMW. '¢ We are raising our iPod estimates slightly. We have raised our unit estimates from 851,000 to 900,000 for the June quarter and from 1.0 million to 1.1 million for September. Our June EPS estimate remains at $0.15 and September is raised a penny to $0.18. '¢ We also are raising out F2006 estimates from $8.88 billion in sales and $0.79 EPS to $9.02 billion and $0.82 EPS. Our higher estimates are based on 14% top line growth rather than 12%. '¢ We rate Apple a Buy and are increasing our price objective from $32 to $39 per share. The $39 price objective equates to an EV/Sales of 1.3X, between Dell's and HP's ratios. Near term, we view Apple as a momentum-driven stock depending on rising earnings estimates. '¢ We think there is less chance for an upside surprise this quarter than the next two. iPod Minis are still only sold in the U.S., and European efforts are just starting. Risks include the creative market not upgrading, continued PC share loss, and increasing iPod competition.

More from M L -

The flat panel iMac is due for an update, having gone 27 months in the current form factor. Normally a major upgrade comes along every 18 to 24 months. Apple even mentioned this in its March 10-Q, which stated 'The current flat panel iMac and eMac form factors are approximately 2 years old, which continue to contribute to declining net sales.' The iMac is the only computer left to update. Apple updated its laptops on April 19 with speed bumps for both the Power Book and iBook. On June 9 Apple announced its new 2.5 GHz G5 Power Macs. Although there could be some iPod enhancements, it is the iMac that needs the performance boost. If Apple were to update its iMac form factor, we could see it separating the CPU from the display. With today's flat panel iMac, if a PC user switches to the Mac they likely already have a display while an Apple would make him buy another. We believe a low-end iMac without the display could be beneficial to Apple's desire to attract switchers.

quote:Originally posted by ruddy:Well Merrill Lynch just raised their target to $39 today. From the private report, sorry no linkies.

quote:Highlights: (snip)The flat panel iMac is due for an update, having gone 27 months in the current form factor. Normally a major upgrade comes along every 18 to 24 months. Apple even mentioned this in its March 10-Q, which stated 'The current flat panel iMac and eMac form factors are approximately 2 years old, which continue to contribute to declining net sales.' The iMac is the only computer left to update. Apple updated its laptops on April 19 with speed bumps for both the Power Book and iBook. On June 9 Apple announced its new 2.5 GHz G5 Power Macs. Although there could be some iPod enhancements, it is the iMac that needs the performance boost. If Apple were to update its iMac form factor, we could see it separating the CPU from the display. With today's flat panel iMac, if a PC user switches to the Mac they likely already have a display while an Apple would make him buy another. We believe a low-end iMac without the display could be beneficial to Apple's desire to attract switchers.

Yeah, I would LOVE to see this happen with the headless iMac (and no, please let's not start THAT again) but we all expected bumped G5s what, 6 months ago? 3.0GHz didn't happen, nor has the 90nm G5s even across-the-board.

As much as I would love to see a G5 iMac next week, I just can't see it happening in light of the 'don't expect G5 this and that anytime soon' comments from Apple. Now, *perhaps* Apple is holding back on the 1.8 and 2.0 FX chips to populate the iMac, and that's why we don't see them in the G5, because the G5 can handle cooling the 130nm chips. Okay, that works for me. But I'm not hopeful of, effectively, the return of the Cube as much as I love mine - at least not soon.

If true, the rumors of Apple dropping the 17" flat screen effectively kills any hope of a headless iMac, IMO. Maybe Apple will be content selling a low-end box without a branded monitor, or perhaps Apple will have a 2nd line of rebranded CRT/LCD monitors (sans Al), but I don't yet see good reason to be optimistic here.

stock is off to the races. technically, you can't ask for a better chart. the story has clearly decoupled from the fundamentals at some level, so aapl is a momentum stock here. just watch the technicals and it should be relatively easy money.

quote:Originally posted by mslee:stock is off to the races. technically, you can't ask for a better chart. the story has clearly decoupled from the fundamentals at some level, so aapl is a momentum stock here. just watch the technicals and it should be relatively easy money.

-hedge fund analyst view

This is a fancy-schmancy way of saying "a bubble." It isn't all clear to me what is driving it; it might be a bunch of plungers, it might be people with insider knowledge, it might be ????? Part of it is that folks are loading up on "tech stocks" again, more generally. The problem of course of "watching the technicals" ... is knowing when to get out if/when the bubble pops.

The really big question here is what if any of this is motivated by the EXPECTATION (either from real insider information, or just a gut feeling) that Apple really will roll out something compelling shortly.

If WWDC comes and goes and there's nothing ... this could go phhhhtttt .. pretty fast. On the otherhand if, Apple really brought out something that looked 'hot' as a true personal computer at a nice price, or brought out something else that really seemed like a winner (pick fantasy of your choice .... tablet, "digital hub" ... whatever) then yeah, it may carry on.

OT- in HS, this one friend of mine (one of the smartest people I know, and also a huge stoner), answered every question on a spanish test with "En Feugo" - "What is that building in the center of town?" "La Igelsia, y es en fuego". "What do you want for dinner tonight?" "Fuego". What is the Capital of El Salvidor? "No se, pero el es en fuego. Mucho!"We laughed. Esp. at the F he got, considering that he had actually answered 90% of the questions correctly. /OT

Piper Jaffray upped their target for AAPL to 40 (from $32) today, and raised their "market perform" rating to "market outperform," saying the street is underestimating Apple's digital convergence opportunities, which they believe will spark underlying demand for Mac products and create momentum among AAPL investors.http://finance.yahoo.com/q/ud?s=AAPL

AAPL traded in the pre market this morning above 34, but is falling now after the open. Profit-taking may continue now, but it's hard to say whether the runup will continue after the usual "sell on news" phenom. WWDC announcements could just as well spark new and continued interest, especially with the earnings announcement for the June quarter coming up in just a few weeks.

quote: This is a fancy-schmancy way of saying "a bubble." It isn't all clear to me what is driving it; it might be a bunch of plungers, it might be people with insider knowledge,

Some insiders are selling.

quote: Fred Anderson began his retirement from Apple Computer by picking up almost $6 million from exercising options and selling shares in the Cupertino computer maker's stock.

Anderson, who joined the company in 1996, retired as Apple's chief financial officer June 1, but just days later joined the company's board.

From June 2 to June 6, Anderson exercised options to buy 500,000 Apple shares for $17.31 each, according to Thomson Financial. He sold those shares over the same days for prices ranging from $29 to $29.95 each, for a gain of $5.9 million.

quote:Originally posted by BadAndy:SJ did the WWDC show with no new hardware other than 30" cinema displays. My guess is that this is a cold fire-hose of water.

AAPL investing 101: New hardware almost never moves the stock anywhere but downward. It's invariably the _anticipation_ of new hardware that drives it upward. It's classic "buy the rumor, sell the news." Anticipation (read rumors) for new iMacs remain and that'll likely keep some profit-takers from doing their thing.

I'm starting to think that enthusiasm for the stock is more associated with products outside their traditional business of computer HW and SW.

The stock seemed to go up with Airport Express being unveiled. Maybe there's more interest in seeing Apple move away from the computer business and more towards digital devices (IOW, the stuff we used to call convergence).

And it's not just Apple. Some Wall Street sentiment for HP and maybe even IBM to abandon their computer lines for their much more profitable (esp. margins) printer and services businesses.

quote:Originally posted by wco81:I'm starting to think that enthusiasm for the stock is more associated with products outside their traditional business of computer HW and SW.

The stock seemed to go up with Airport Express being unveiled. Maybe there's more interest in seeing Apple move away from the computer business and more towards digital devices (IOW, the stuff we used to call convergence).

And it's not just Apple. Some Wall Street sentiment for HP and maybe even IBM to abandon their computer lines for their much more profitable (esp. margins) printer and services businesses.

Well, how can the enthusiasm be for computer hardware when there has been NONE short of a single G5 release?

Seriously, Apple needs to get a consumer computer out the door for any kind of digital hub strategy to work - the COMPUTER is the hub, remember?

Sure, the iPod is good, and iTMS is good, and Tiger and a billion other things are good - but at the end of the day, you need computers for people to buy. The iMac/eMac line is a disaster, and it's the hub. So, yes, I think we'll hold here or slide until iMac is worked out. Plus, Apple's assault on Longhorn is clearly an indication that they want a piece of the enterprise, and 10.4 Server shows that - but, uh, what about an enterprise desktop system? Hrm. I'm supposed to drop $3k per desktop for the cheapest G5+cheapest monitor? Not gonna happen...